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Published by 

Thb American Economic Committee for Palestine 
80 Broad Street 
New York, 1ST. Y. 



SOLUTION. „ . W ™*J 

Jewry is again confronted by a catastrophic mass 
migration problem. The impoverishment and degrada- 
tion of the 600,000 Jews of Germany and Austria need 
no elaboration. The Jews of Poland, 3,000,000 of them, 
are regarded as "excess population" and are slowly 
but surely perishing. In Rumania and Hungary the 
pressure on the Jewish populations comprising ap- 
proximately 1,175,000 persons is daily increasing. Al- 
together there are in these countries about 5,000,000 
Jews who, as Dr. Chaim Weizmann, President of the 
Jewish Agency, put it, are "doomed to be pent up in 
places where they are not wanted and for whom the 
world is divided into places into which they cannot 
enter." This, in short, is the magnitude of the problem. 
There is no short cut to a solution. New homes 
will have to be found for a substantial portion of this 
population. But even if all the nations represented at 
the Evian Conference followed the example of our own 
^£ country these refugees could not be transplanted to 
other parts of the world in less than a decade. The 
^ 5 process of transplantation can only be gradual and 
must be so planned as to achieve relief not only for 
v^those who are emigrating but also for those who 
^ remain behind. It must be remembered that the 
^. economic life of the whole area of Eastern and Central 
iy- Europe has deteriorated since 1914; that the dominant 
V^Vgroups in these newly-constituted post-war states be- 
came infected with a virulent nationalism which in 
opart expressed itself in the gradual exclusion of Jews 
Sfrom most avenues of livelihood in industries and 
^public services; that with emigration outlets for Jews 
c ^ practically closed a state of tension has arisen which 
5i made not only misery for the Jews but created a 
dangerous threat to European international relation- 

ships. This dangerous pressure could be gradually 
eased by the annual exodus of from 200,000 to 250,000 
Jews from this area. If the movement of emigration 
could be so organized as first to take out the younger 
men and women, between eighteen and twenty-five, who 
at those ages are the most active competitors of their 
non-Jewish neighbors for the few available avenues 
of livelihood, the position of the remaining Jews would 
be further improved. Over a period of years the 
sustained withdrawal of this age group, which com- 
prises persons who are about to marry and have children, 
would result in a relatively rapid and permanent re- 
duction of the Jewish populations in those areas. 

This task is a challenge to the conscience and well- 
being of the civilized countries of the world. "There 
can be no peace if national policy adopts as a deliberate 
instrument the dispersion all over the world of millions 
of helpless and persecuted wanderers with no place to 
lay their heads." 1 It is equally true that there ean 
be no peace if the civilized countries of the world, in- 
cluding the Jews of the world, do not meet this challenge 
by offering homes to at least from 200,000 to 250,000 
of these wanderers annually. The Jews of the world 
believe that from 100,000 to 125,000 persons of this 
annual migration can be absorbed by Palestine. They 
stand ready to make this economically possible with 
"men and money'*. Let us first examine the Palestine 
part of the problem. 


A. The Dynamic Concept of Absorptive Capacity. 

The area of Palestine (exclusive of Trans- Jordan) is 
10,400 square miles. Its population is approximately 

1 President Roosevelt's Radio Speech to New York Herald-Tribune 
Forum, October 26, 1938, New York Eerald-Tribiine, October 27, 103S. 


1,415,723—890,352 Moslems, 401,577 Jews and 123,814 
others. 2 How many more immigrants can the country 
economically absorb? Tkis question has given rise to 
many definitions of absorptive capacity. Most of them 
imply a static concept — the size of the country; its 
present population; its present cultivable area; its ap- 
parent lack of natural resources, raw materials and the 
like. Under this concept the attitude toward the problem 
of immigration and colonization becomes mechanical and 
out-of-joint with life. Most weight is given to the 
material and inanimate elements at hand and least to 
the decisive power of human resourcefulness, devotion 
and experience, of capital, and of the propulsive force 
generated by Jewish misery. This mental rigidity in- 
evitably leads to the fallacy of a static equilibrium of a 
closed community. But what is more serious, it is 
responsible for much of the confusion that today exists 
in the public mind concerning Palestine and the Man- 
date. Experience in Palestine itself has proved that 
the "economic absorptive capacity" of that country can- 
not be measured with a slide-rule or yardstick and 
that its ultimate scope cannot be predicted. It is a 
dynamic, an expanding, concept. "Immigration is con- 
ditioned by absorptive capacity but immigration itself, 
with its accompanying influx of wealth and the driving 
power of pioneer energy, enlarges absorptive capacity 
by creating new opportunities for livelihood." 3 The 
Palestine Royal Commission puts it more vividly: 

"In 1934 there were 42,359 authorized 
immigrants (into Palestine), in 1935, 61,854. 
... so far from reducing; 'economic absorp- 
tive capacity*, immigration increased it. The 
more immigrants came in, the more work 
they created for local industries to meet 
their needs, especially in building; and more 

2 Government of Palestine, General Monthly Bulletin of Current 
Statistics, September 1938, p. 370. 

3 A. Granovsky, "Absorptive Capacity and Development", Palatine 
& Middle Bast Economic Magazine,, January 1337, p. 15. 


work meant more room for immigrants under 
the 'labor [immigration] schedule \ Unless, 
therefore, the Government adopted a more 
restrictive policy, or unless there were some 
economic or financial set-back, there seemed 
no reason why the rate of immigration should 
not go on climbing up and up." 4 

Dr. Weizmanii states the proposition in another form : 

"In the case of the immigrant who comes 
here his one aim in life is not only to make 
himself useful, but to create opportunities 
for other people to come. I would submit to 
the Commission respectfully that if they asked 
any settler, whether in a colony or whether 
in a factory, if he was happy or if he was 
satisfied, in ninety cases out of a hundred 
they would get a satisfactory answer, but the 
one thing they will ask is, 'Will other people 
come after meV and, not only have the 
immigrants not been a burden to the com- 
munity, but they have created opportunities 
for the absorption of ever more people on a 
larger scale. 1 ** 

That the expanding principle of economic absorptive 
capacity has been operative in developing the economic 
structure of Palestine since the post-war advent of the 
Jews will become evident from a cursory review of a 
few relevant figures. 

B. Operation of the Dynamic Principle of Absorptive 
Capacity in Industry and in Other 
Non-agricultural Occupations, 

The first official Census of Palestine Industries, 
taken in 1928, states that industry in its larger sense 
was practically non-existent in Palestine before the 
War, and that machinery was practically unknown, 6 

4 Report of Palestine Royal Commission, London, 1937, p, 85. 

5 Minute* of Evidence, Palestine Royal Commission, London, 1937, 
p. 37. 

6 Government of Palestine, First Palestine Census of Industries, 
1928, p. 5. 

"Since 1928, and especially since 1933, there has been 
a marked advance, not only in the output of Pales- 
tinian industry but in its diversification and its technical 
equipment." 7 The British Commercial Agent at Haifa, 
in his report to the British Government Department of 
Overseas Trade on economic conditions in Palestine in 
July 1935, writes as follows: 8 

" Various factors have combined to foster 
the rapid development of local industries in 
the past two or three years. In the first place 
they form an outlet for the new capital flow- 
ing into the country, a considerable propor- 
tion of which is still lying idle. They also 
provide work for new immigrants. Their pro- 
moters are often new arrivals with years of 
experience in particular industries which they 
desire to use in their new home. Local de- 
mand has so much increased as to justify local 
production of certain goods and expansion 
of existing factories. The promoters are 
fortunate in that they can open their works 
with the most modern plant and methods." 

The growth of Jewish industry and handicrafts from 
1921 to 1937 is vividly shown in the following table: 9 




workers & owners 


Value of annual output 














4,750 10,968 19,595 30,040 

500,000 2,510,000 5,352,000 9,109,000 

600,000 2,234,000 5,371,000 11,637,300 

880 10,100 50,500 106,495 



since 1933 




Since 1921 the personnel in Jewish industry in- 
creased six times, the output seventeen times, the 
capital eighteen times and the machinery and equip- 
ment even to a greater degree. 9 

7 Jewish Agency for Palestine, Memorandum Submitted to the 
Palestine Royal Commission, London, 1936, p. 217. 

Sib., p. 217. 

9 Jewish Agency for Palestine, "Census of Jewish Industry and 
Handicrafts 1937", Bulletin of Economic Research Institute, March- 
April 1938, p. 54. 

*£P=Palestine Pound=Pound Sterling. 


Side by side with this growth of industry, parallel 
and subsidiary urban work opportunities developed. 
Building construction, in which the Jews of Palestine 
invested approximately $100,000,000 since 1932 alone, 
gave employment to about 16,500 Jews in 1935. 10 
Owing to the disturbances, building workers dropped 
to 11,000 in 1937. In 1937 transportation, clerical work, 
unskilled work, services, liberal professions and un- 
classified work gave employment to 41,658 additional 
workers. 11 This inflow of Jewish immigrants and 
Jewish capital not only developed these work oppor- 
tunities for the Jews but quickened industrial activity 
among other sections of the population. As long 
ago as 1933 the Government reported that the non- 
Jewish industrial undertakings had increased by more 
than 80% over the pre-War non- Jewish, establish- 
ments in the country. 12 This whole structure of in- 
dustrial and commercial activity, which sustains a 
large portion of the Palestinian population, represents 
an entirely new source of wealth. It is a direct out- 
growth of Jewish immigration, of the application of 
human resourcefulness, experience, capital and the 
propulsive force generated by human misery. It is 
the dynamic principle of economic absorptive capacity 
at work. Not only has it not displaced any part of 
the non-Jewish population but it has made new places 
for them where none existed before. 

0. The Operation of the Dynamic Principle of 
Absorptive Capacity in Agriculture. 

The development of agriculture and horticulture par- 
alleled that of industry. Before examining the present 

10 Horowitz and HInden, Economic Survey of Palestine, p. 106. 

11 Jewish Agency for Palestine, Memorandum to the Permanent 
Mandates Commission 13S1, June 1038, p. 16. 

12 Report by His Majesty's Government on tUe Administration of 
Palestine find, Trans-Jordan 1DSS, London, 1934, p. 27. 

position of the agricultural and horticultural structure 
of the country it may be instructive to read a descrip- 
tion of the Maritime Plain in 1913, that area of Pales- 
tine which is now the most productive and the most 
thickly populated. The Royal Commission quotes the 
following description in its Report and states that in 
its opinion it is truthful and disinterested. 13 

"The road leading from Gaza to the north 
was only a summer track suitable for trans- 
port by camels and carts. ... In the rainy 
season it was impassable. 

"In the villages on both sides of the track 
and as far as the hills to the east no orange 
groves f orchards or vineyards were to be seen 
until one reached Yabna Village. Trees gen- 
erally were a rare sight in these villages. . . . 

"In all the villages dotting the plain be- 
tween Gaza and Jaffa there was only one 
well in a village and in the smaller villages 
there were no wells at all. . . . Not in a 
single village in all this area was water used 
for irrigation. "Water was scantily used for 
drinking purposes by man and beast. 

"Houses were all of mud. No windows 
were anywhere to be seen. The roofs were 
of caked mud. . , . The family lived in the 
elevated part while in the lower part the 
cattle were housed. The cattle were small 
and poor. So were the chickens. 

". . . The ploughs used were of wood. 
European ploughs were not known in the 
whole area. Not a village eould boast of a 
cart. Sowing was done by hand; harvesting 
by the scythe and threshing by animals. 
Fields were never manured. 

". . . Every second year the fields were 
measured by stick and rope and distributed 
among the cultivators, Division of land al- 
ways led to strife and bloodshed. 

"The yields were very poor. . . . The 
wheat yield went to Government in payment 
of tithe and to the 'effendi' in payment of 
interest on loans. The 'fellah* [Arab peas- 
ant] himself made his bread from dura. 

' ' The sanitary conditions in the villages 
were horrible. Schools did not exist and the 

13 Report of Palestine Royal Commission, op. cit., pp. 233, 284. 


younger generation rolled about in the mud 
of the streets. The rate of infant mortality 
■was very high. There was no medical service 
in any of the villages distant from a Jewish 
settlement. In passing a village one noticed 
a large number of blind, or halfblind per- 
sons. Malaria was rampant. 

11 . . . In the neighborhood of Wadi Rubin 
considerable quantities of vegetables, espe- 
cially tomatoes, were grown. But the stand- 
ing water in the *wadi J devastated the whole 
area, being a breeding place of malaria. At 
"Wadi Hunein there were several orange 
groves belonging to ( effendis J < Most of them 
were in a very neglected state. They were 
planted in irregular formation and irrigated 
in a very primitive manner, , . . At Beit 
Dajan, Yazur and Jaffa considerable areas 
were planted with orange trees. The quality 
of these grooves was not superior to those of 
"Wadi Hunein. 

"The entire area of orange groves owned 
by Arabs before the war was 20,000 dunams* 
while the Jews owned 10,000 dunams. The 
export of oranges , . . [in 1913 amounted 
to 910,548 cases]. 

"The area north of Jaffa as far as Hedera 
and Zichron Jacob, known as the Sharon, 
consisted of two distinctive parts divided by 
a line from south to north. . . . The villages 
in this area were few and thinly populated. 
Many ruins of villages were scattered over the 
area as owing to the prevalence of malaria 
many villages were deserted hy their inhabi- 
tants who migrated to the hills . . . ." 

Is it not fair to say that at that time, in 1913, the 
Maritime Plain had, under the Government's defin- 
tion of cultivable area, which is such land as "is 
actually under cultivation, or which can be brought 
under cultivation by the application of the labour and 
resources of the average Palestinian [Arab] cultiva- 
tor," 14 reached the limit of its absorptive capacity? 

* One fiunam^approximately ¥& acre. 
14 7& M p. 234. 


Contrast this position of the country with that which 
the Royal Commission found in 1936. 15 

" . . . Twelve years ago the National 
Home was an experiment : today it is a ' going 
concern'. . . . The proeess of [Jewish] 
agricultural colonization has steadily con- 
tinued. . . . There are now 203 agricultural 
settlements containing some 97,000 people. 
Some of the new colonies are again in the 
uplands of Galilee, northwards of Mount 
Tabor; but most of them, as before, are in 
the plains. Three-parts of the Plain of 
Esdraelon, all of the Valley of Jezreel, a 
great part of the Maritime Plain between 
Jaffa and Mount Carmel, and another large 
area south of Jaffa — these wide stretches of 
plain-land, drained and irrigated and green 
with citrus trees or brown from the plough, 
are the agrarian basis of the National Home. 
The country-towns have likewise grown and 
prospered. . . . 

"Yet more impressive has been the urban 
development Tel Aviv, still a wholly Jewish 
town, has leaped to the first place among 
the towns of Palestine. Its population now 
probably exceeds 150,000. ... It has grown 
too fast for orderly town-planning j its front- 
age on the sea has so far been neglected; 
. . . but its main boulevard and some of its 
residential quarters, its shops and cafes and 
cinemas, above ail the busy, active people in 
the streets already reproduce the atmosphere 
of the older Mediterranean sea-side towns of 
Europe. But it is essentially European. 
Prom its beginnings the contrast between Tel 
Aviv, an artificial creation, rising so quickly 
from a barren strip of sand, and ancient 
Jaffa, still more the contrast with a purely 
Arab town among the hills like Nablus, was 
clearly marked, and it is now quite startling. 

"There is the same effect at Jerusalem. 
. . . The population of Jerusalem has 
grown to 125,000: and of that some 76,000 
are Jews. 

"The growth of Haifa, too, which has now 
a population of 100,000, is only less remark- 
able than that of Tel Aviv. But Haifa 
is not, like Tel Aviv, a wholly Jewish con- 
cern. . . . The European shipping in the 

15/*., pp. 113, 114, 115, 116, 117, 125. 


new and spacious harbour is serving Arab 
as well as Jewish Palestine. We observed that 
many cases of goods in the sheds at the quay- 
side were marked for transit to Baghdad. 

"But, broadly speaking, the remarkable 
urban development in Palestine has been 
Jewish. Nor is it in Jewish eyes by any 
means complete. If all goes well with the 
National Home, if the 'boom' persists, if ex- 
panding industries can find expanding mar- 
kets, if the immigration of men and money 
continues to supply the demands of produc- 
tion and consumption alike, new towns, it 
is foretold, will spring up along the sandy 
coast, where no one can assert, whatever 
may be said inland, that a Jew coming in 
means an Arab going out. Already, in- 
deed, on a barren waste just south of Jaffa 
a whole township has been planned. . . . 
To some Zionists this rapid growth of in- 
dustry and urban life may seem to threaten 
one of the basic principles of their original 
cr eed — that the return to Palestine was a 
return to work on its soil. But so far, at 
any rate, it can be said that the industrial 
structure has not entirely outgrown its 
agrarian base. The relation between rural 
and urban areas, between industrialists and 
agriculturists, has remained fairly constant 
from the start. , . * 

"With every year that passes, the contrast 
between this intensely democratic and highly 
organized modern community and the old- 
fashioned Arab world around it grows 
sharper, and in nothing, perhaps, more 
markedly than on its cultural side. The 
literary OTitput of the National Home is out 
of all proportion to its size. Hebrew transla- 
tions have been published of the works of 
Aristotle, Descartes, Leibnitz, Fichte, Kant, 
Bergson, Einstein and other philosophers, and 
of Shakespeare, Goethe, Heine, Byron, 
Dickens, the great Russian novelists, and 
many modern writers. In creative literature 
the work of Bialik, who died in 1935, has 
been the outstanding achievement in Hebrew 
poetry, and that of Nahum Sokolov, who 
died in 1936, in Hebrew prose. . . . But 
perhaps the most striking aspect of the cul- 
ture of the National Home is its love of 
music. It was while we were in Palestine, 


as it happened, that Signor Toacanmi con- 
ducted the Palestine Symphony Orchestra, 
composed of some 70 Palestinian Jews, in 
six concerts mainly devoted to the works 
of Brahms and Beethoven. On each occasion 
every seat was occupied, and it is note- 
worthy that one concert was reserved for 
some 3,000 workpeople at very low rates and 
that another 3,000 attended the Orchestra's 
final rehearsal. All in all, the cultural 
achievement of this little community of 400,- 
000 people is one of the most remarkable 
features of the National Home. 

' ( . . . It is the same with science. The 
Daniel Sieff Research Institute at Rehovot 
is equipped with the most delicate modern 
instruments; the experiments conducted there 
are watched by chemists all over the world: 
yet from its windows can be seen the hills 
inhabited by a backward peasantry who 
regard it only as the demonstration of a 
power they hate and fear and who would 
like, no doubt, when their blood is up, to 
destroy it. 

11 . . . The Jews in Palestine, to begin 
with, are happy. They are not as happy as 
they were before the outbreak of last year. 
. . . But, speaking generally, whether it 
be the Jew who Has been driven from a com- 
fortable life in a cultured 'milieu' and is now 
digging all day in the fields and sleeping in 
a bare cottage, or whether it be the Jew who 
has emerged from a Polish ghetto and is now 
working in a factory at Tel Aviv, the domin- 
ant feeling of both is an over-whelming sense 
of escape. The champions of Zionism have 
always held — and on the whole they are now 
proved right — that a Jew released from an 
anti- Jewish environment and 'restored* to 
Palestine would not only feel free as he had 
never felt before but would also acquire a 
new self-confidence, a new zest in living 
from his consciousness that he was engaged 
in a great constructive task. . . . 

"In Arab as in Jewish Palestine the most 
striking fact is the growth of population. 
It has risen since 1920 from about 60Oj000 
to about 950,000 ; and in this case, unlike the 
Jewish, the rise has been due in only a slight 
degree to immigration. No accurate estimate 
can be made of the number of Arabs who 
have come into Palestine from neighbouring 



Arab lands and settled there, but it may 
be reckoned that roughly nine-tenths of the 
growth has been due to natural increase, and 
it has been a growth of over 50 per cent, in 
17 years. Those are remarkable figures, es- 
pecially in view of the general belief that the 
population of Palestine under the Ottoman 
regime was more or less stationary, , . ." 

According to estimates of the Government, the total 
agricultural population of Palestine in 1935 amounted 
to 632 ; 600. 1G The Jewish rural population had grown 
from 14,782 in 1922 to 98,303 in 1936. 17 Of this rural 
population approximately 56,000 were directly sub- 
sisting on agriculture. 18 Jewish productivity on the 
land has greatly increased and co-operative methods 
in Jewish agriculture have developed. In his testi- 
mony before the Palestine Boyal Commission, Dr. 
Arthur Euppin, the head of the Jewish Agency In- 
stitute of Economic Eesearch, cites a few interesting 
examples : 18a 

" . . . We then developed co-operative 
marketing, which was very necessary because 
the individual farmer eould not get full 
value for his produce in the towns and we 
succeeded, or I might say the settlers them- 
selves succeeded, in establishing a co-opera- 
tive marketing society which is called Tnuva. 
This society has increased its sales in the last 
ten years from £55,000 in 1926-7 to £550,000 
in 1935-36. All our endeavours were directed 
to intensification of farming, thereby reduc- 
ing the farm unit. . . . In the beginning 
settlers were given 250 dunums of land* 

16 Memoranda Prepared by the Government of Palestine, Palestine 
Royal Commission, London, 1937, p. 16. 

17 Jewish Agency for Palestine, "Census of Jewish Agriculture in 
1936", Bulletin of Economic Research Institute, November-December 
1937, p. 105. 

18 Jewish Agency for Palestine, Memorandum to the Mandates 
Commission 1986, June 1937, p. 5. 

18a Minutes of Evidence, Palestine Royal Commission, London, 1937, 
p. 103. 

* Italicized sentence is not part of quotation, but a summary of a 
portion thereof. 



Wo tried to reduce this area by giving tin* 
settlers better livestock and ferMIiseiu AVo 
started after the "War with 100 dunums of 
unirrigated land in the Emelc and after irri- 
gation was developed we reduced it to 20 
dunums, because as a rule in Palestine the 
income of one dunum of irrigated land is 
equal to the income from five dunums of un- 
irrigated land. . . . We have succeeded, 
for instance, in importing cows from Holland, 
and we increased the yield of a cow from 
700 litres a year at the beginning to an 
average of about 4,000 litres. We have got 
eows giving as much as 8,000 litres, but they 
are not the average ; they are exceptional 
cases. In the same way we brought over new 
poultry, the leghorn, from the United States, 
and in this way we could increase the number 
of eggs laid by a hen from 70 to 120 a year. 
We raised the yield of wheat from 70 kilos, 
a dunum to 130 and 140. We introduced 
new plants, for instance, lucerne as fodder 
for cows, which was not known before and is 
now grown in all our settlements. We have 
introduced new trees, for instance, bananas, 
many varieties of deciduous fruits. We had 
here the support of our agricultural experi- 
ment station ... at Rehovot." 

The citrus area which, as stated above, aggregated 
30,000 dunams in 1913 had grown to 288,000 dunams 
by 1935, of which 153,000 dunams were owned by 
Jews and 135,000 dunams by Arabs. 19 According 
to the Government estimate made on March 31, 1937, 
the citrus area had up to that time expanded to 
298,000 dunams. 30 The export of Palestine citrus fruit 
had risen from 2,470,000 cases with a value of £P745,000 
in the 1930-31 season to approximately 10,774,000 cases 
with an approximate value of £P3,900,000 in the 1936-37 
season. At that time Palestine had already achieved 
third place in the list of the citrus exporting countries 
of the world. 21 

19 Horowitz & Hinden, op, cit., p. 69. 

20 Government of Palestine, General Monthly Bulletin of Current 
Statistics, Time 1937, p. 10. 

21 Horowitz and Hinden, op, cit,, p. 70. 

ty&n tv-q 


As of June 30, 1936, the total Jewish land holdings 
amounted to 1,394,456 dunams, of which 1,040,070 con- 
sisted of cultivable land (cultivable as defined by the 
Government). 22 Of this area it has been estimated 
that fully one-third when purchased by Jews was 
barely fit for cutivation. "Not only have the Jews 
eliminated malaria from many parts of Palestine, but 
they have converted waste and uninhabited areas into 
centers of intensive agriculture. As a result of the 
reclamation of those areas, production has been largely 
increased and the density of the agricultural popula- 
tion considerably augmented. . . . The size of the 
average unit holding has been greatly reduced after 
the transfer of land into Jewish possession." 23 In 
this connection the observations of the Palestine Royal 
Commission are interesting: 24 

"The Arab charge that the Jews have ob- 
tained too large a proportion of good land 
cannot he maintained. Much of the land 
now carrying orange groves was sand dunes 
or swamp and uncultivated when it was pur- 
chased, ' ' 

The coming of the Jews provided an expanded market 
for agricultural products, furnished purchasers for 
land at high prices thus enabling the Arab peasants 
to dispose of surplus land and to utilize the proceeds 
for the introduction of more productive methods of 
cultivation on the remainder of their holdings, trans- 
formed Palestine agriculture from its primitive pre- 
War state to present-day standards, enabled the Gov- 
ernment to make loans and wholesale tax remissions 
to the Arab peasant as a result of the flourishing 
state of Palestine's finances, and, most important of 
all, has given the Arab peasant an object lesson in 

22 Jewish Agency for Palestine, Memorandum Submitted to the 
Palestine Royal Commission, op. cit., p. 129. 
S3 A. Granovsky, The Land Issue in Palestine, Jerusalem, 1036, p. D2. 
24 Report of Palestine Royal Commission, op. cit., p« 242. 


modern agricultural practice which ho has not been 
slow to adopt. More again the dynamic principle of 
economic absorptive capacity has been at work. 

D. Potential Absorptive Capacity of Agriculture and 
Non-agricultural Occupations in Palestine. 

In the light of this record what are the possibilities 
for the future acceleration of the agricultural absorp- 
tive capacity of Palestine? The Government estimates 
the total land area of Palestine at 26,319,000 dunams — 
13,742,000 dunams in Palestine north of Beersheba and 
12,577,000 dunams in the Beersheba Sub-District. It 
estimates total cultivable land area in the whole of 
Palestine at 8,760,000 dunams. 25 As already stated 
the Government defines "cultivable area" as land 
"which is actually under cultivation or which can be 
brought under cultivation by the application of the 
labor and resources of the average Palestinian [Arab] 
cultivator." The Government makes no distinction be- 
tween "cultivable" and "irrigable" land. Such a dis- 
tinction is of course indispensable in dealing^ with 
estimates of the ultimate agricultural absorptive ca- 
pacity of the country. Palestine experience has shown 
that, whereas from 100 to 130 dunams of non-irrigated 
land are necessary for the maintenance of an average 
family, only from 20 to 25 dunams of irrigated land 
are required for that purpose. 26 Manifestly, if, by 
the application of the kind of resourcefulness, experi- 
ence, capital and the propulsive forces generated by 
Jewish misery which have already accounted for the 
creation of the present economic structure of Pales- 
tine, some millions of dunams of "cultivable" land can 

25 Memoranda Prepared l)y the Government of Palestine, Palestine 
Royal Commission,, op. cit., p. 17, 

26 Minutes of Evidence, Palestine Royal Commission, op. cit., (Artttui 
Euppin'g. evidence), p. 103. Sir John Hope Simpson, Report on 
Immigration, Land Settlement and Development, London, 1030, p. 04, 


be irrigated, the economic absorptive capacity will 
continue to expand. It is to be regretted that the 
Government has not yet carried out any hydrographie 
survey of the country, but certain sections of the 
country have already been surveyed by Government 
and Jewish organizations. As to the development 
and utilization of water resources the following excerpts 
from official reports are instructive: 

"Immense possibilities exist in the irriga- 
tion cultivation of suitable crops that would 
give profitable returns, and particularly al- 
low of a bigger export trade.' J2 ? 

■*The Acre Plain is said to be entirely ir- 
rigable. "M 

"The result of the (Beisan) Agreement, 
and specially of the modification of the 
Agreement made in September, 1928, pub- 
lished in the Official Gazette of 16th Septem- 
ber of that year, have taken from the Gov- 
ernment the control of a large area of fertile 
land, eminently suitable to development, and 
for which there is ample water available for 
irrigation. ' '29 

"(In the Jordan Valley) it is well within 
the bounds of possibility, both that arrange- 
ments could be made which will provide a 
larger supply of water than that at present 
in sight, and that a larger area of land may 
prove to be cultivable than is at present 
recognised and included in the cultivable 
area. "30 

"It should be practicable to achieve in other 
areas the measure of development which has 
taken place around Jericho since the proper 
organization of the irrigation has heen ef- 
fected. "31 

1 ( Given the possibility of irrigation there is 
practically an inexhaustible supply of cultiv- 
able land in the Beersheba area. ' '32 

27 G. S. Blake, Geology and Water Resources of Palestine, Jerusa- 
lem, 1028, p, 51. 

28 Simpson, op. cit., p. 83. 

29 J&.„ p. 84. 
30J&„ p. 80. 

31 Report oy Mr. F. A. Btocktlale on His Visit to Palestine and 
Transjordan 1935. Colonial Office, (London), October 1935, p. 47. 

32 Simpson, op. cit, p. 20. 


An outstanding American geologist, Mr. F. Julius 
Fobs, has conducted an intensive study of the water 
resources of Palestine since 1919. He has made a num- 
ber of visits to Palestine and has accumulated probably 
the most comprehensive and exhaustive data on the 
water resources of the country. He has supplemented 
his own studies with consultations with outstanding 
American water engineers. As a result of these studies 
he submitted a detailed memorandum of his findings to 
the Royal Commission on "The Water Resources of 
Palestine." He states that the available water re- 
sources of Palestine, if properly conserved, will make 
it possible to irrigate 3,500,000 dunams of land in Pales- 
tine (exclusive of Beersheba) after providing for the 
civil and industrial uses of a population of 2,500,000.* 

For the purpose of calculating the total number of 
agricultural families which the cultivable area of Pales- 
tine will sustain, the Government estimate of cultivable 
area, namely, 8,760,000 dunams, is here taken. To this, 
however, we must add 500,000 dunams which, according 
to the Jewish Agency, are now under actual cultiva- 
tion in Beersheba in escess of the cultivable area esti- 
mated by the Government for Beersheba, making a 
total of 9,260,000 dunams within the Government defini- 
tion.** Allowing 130 dunams of non-irrigable land 
and twenty-five dunams of irrigable land for each 
family and assuming that 3,500,000 dunams out of 
the total cultivable land, as above set forth, will ulti- 

• Should the population of Palestine in the future exceed 2,500,000 
persons a very small portion of the 3,500,000 dunams estimated by 
Mr. ffohs as irrigable would have to be withdrawn from irrigation 
in order to provide additional water for the civil and industrial uses 
of the population. 

** Government estimates for Beersheba classify 1,640,000 dunams 
as cultivable. According to figures of the Government Department 
of Agriculture and Fisheries the area of this district actually under 
cultivation in 1034/35 was 2,107,000 dunams,33 

33 Jewish Agency for Palestine, Memorandum Submitted to the 
Palestine Royal Commission, op. cit., p. 156. 


mately be made irrigable, we find that the (present) 
cultivable and ultimately irrigable area of Palestine 
will accommodate a total of 184,300 families, or, allow- 
ing five persons to a family, 921,500 persons deriving 
their sustenance from the land. It appears that in 
the below named countries the percentage of earners 
engaged in agriculture and fishing was as follows: 34 

America (United States) 


United Kingdom 




















It is therefore not unreasonable to say that a ratio 
of 3:1 for Palestine, or a ratio of 25% agricultural 
earners to 75% earners in all other occupations, would 
be a desirable ratio. On this basis, therefore, Pales- 
tine can ultimately attain a total population of ap- 
proximately 3,600,000 persons. The present popula- 
tion now being approximately 1,400,000, Palestine could 
reasonably absorb 2,200,000 additional persons. If, 
however, the estimates of the Jewish Agency as to 
ultimately irrigable and immediately cultivable area 
are taken, the absorptive capacity of Palestine would 
be increased by approximately another half-million 

There is not, of course, any hard and fast rule which 
can serve to determine the proportion of agricultural 
population to total population in any given country. 
This proportion necessarily is determined by factors 
such as the area of cultivable land, the degree of agri- 
cultural productivity, the living standards and social 
structure of the population. One consideration which 

34 Statistical Year Book of the League of Nations 1933-84, W< 39-43. 

with respect to PuloHl.ino may properly influence a much 
higher non-agricultural ratio than 3:1 is the special 
position she occupies as an "entrepot". 

"It was not till after the close of the 
General War of 1914-18 that Palestine was 
favoured by the conjunction of circumstances 
required to restore her to her historic position 
as an 'entrepot'. The first of these new 
factors was the commercial development of 
flying and trans-desert motor-traffic as prac- 
tical alternatives to transportation by steam- 
ship — a development which tended to shift 
the alignment of trade-routes from the sea to 
the land. The second factor was the re- 
emergence of Iraq, under British, tutelage, 
from her seven-hundred-years-long economic 
and social eclipse. The third factor was the 
economic rehabilitation of Palestine herself 
through an inflow of Jewish enterprise under 
a British aegis. ... On this showing, 
Palestine held a key position in the twentieth 
century world which was not incomparable to 
the position of Great Britain as the 'entrepot 1 
between Europe and the Americas. . . . Here 
was a Palestinian asset of enduring value." 35 

Whether one can agree with Professor Toynbee's pic- 
ture or not, it nevertheless is true that Palestine is at 
the crossroads of the two or perhaps the three main 
arteries of Europe, Asia and Africa. Palestine has an 
immediate hinterland of 40,000,000 persons in Trans- 
Jordan, Syria, Iraq, Iran and Egypt. If Palestine 
should grow into the "entrepot" which its geographical 
position promises, it will be able soundly to sustain a 
ratio of non-agricultural population to agricultural 
population comparable to the ratio of Belgium which 
is 19.1% agricultural to 79.9% non-agricultural. In 
that case, after the fullest development of Palestine's 
irrigable land (exclusive of Beersheba) has been 
achieved and its agricultural population grows to ap- 

35 Annual Survey of the Royal Institute of International Affairs 
19SJ f) pp. 264 ff., by Professor Toynbee. {Cited in Jewish Agency for 
Palestine, Memorandum Submitted to the Palestine Royal Corwrnis- 
sion, op. cit. t pp. 214, 215.) 


proximately 1,000,000 persons, the non-agricultural por- 
tion of the population would be 4,000,000. If water is 
found in the Beersheba Sub-District, which comprises 
practically one-half of the total area of Palestine, the 
supply of cultivable land would be practically inex- 
haustible, 33 In that case, additional millions could be 
absorbed into the agricultural and industrial life of 

E. Trans-Jordan, 

The relationship of Trans-Jordan to Palestine (Cis~ 
Jordan) is too close to be disregarded in any consid- 
eration of the absorptive capacity of Palestine. Eco- 
nomically the two territories are one. Only the will 
and the judgment of the British Government stand in 
the way of Jewish colonization in that area. 36 

"The area of Trans- Jordan is about 34,- 
000 square miles, and its present population 
is estimated at about 320,000. Thus while the 
country is almost two and a half times as 
big as Palestine it contains only about a 
quarter of its population. . . . The country 
has not been fully surveyed, and there is 
not sufficient expert evidence available to 
form an estimate of the amount of unculti- 
vated land which might be rendered cultiv- 
able. . . . The number of new settlers for 
whom room could be found in Trans-Jordan 
is assessed by some Jewish writers in millions ; 
by those who are opposed to Jewish immi- 
gration in thousands. . . . M 37 

According to recent official estimates, the cultivable area 
of Trans-Jordan is 4,600,000 dunams. 38 The population 
and the economic position of Trans-Jordan have re- 
mained static since 1914. The people of Trans-Jordan 

36 Permanent Mandates Commission, League of Nations, Minutes of 
the Twenty-Third Session, Geneva, 1933 (testimony of M. A. Young, 
Chief Secretary of the Government of Palestine and accredited repre- 
sentative of the mandatory Power), p. 08. 

37 Report of Palestine Royal Commission, op. cit, p. 308. 

38 Jewish Agency for Palestine, Memorandum Submitted to the 
Palestine Royal Commission, op. eit^ p, 210. 


are impoverished. The Trans-Jordan Government lives 
largely on subsidies provided by British annual grants- 
in-aid which amounted to LP 436,000 during the four 
financial years 1931-32 and 1934-35, 39 On the other 
hand, Mr. F. A. Stockdale, Agricultural Adviser to the 
British Secretary of State for the Colonies, reported: 40 

"In Trans- Jordan there are possibilities of 
considerable economic development if finan- 
cial provision can be made for a forward 
policy designed to assist and guide the people 
in their efforts." 

It is not unreasonable to assume that the application 
of the same pioneering energy, capital and devotion 
which the Jews have applied to Cis-Jordan would 
considerably expand the absorptive capacity of Trans- 
Jordan both for Jews and for Arabs. 

F. Jewish Material and Spiritual Need as Accelerators 
of Absorptive Capacity, 

Jewish Palestine shows that great creative forces 
have been generated by the pressure of Jewish misery 
and by the age-old longing of the Jewish people to 
normalize Jewish life on their ancient soil in the social 
framework of the Prophets. Under the impact of 
these forces the static elements which go to make up 
the physical country called Palestine are adjusting and 
will continue to adjust themselves to expanding Jewish 
need. Impelled by these forces the builders of Jewish 
Palestine have frequently projected enterprises and 
employed methods which to orthodox economists ap- 
peared "uneconomic." To a British economist, to a 
member of a British Commission, or to a British 
Government official whose "time sense" is influenced 
by the security which he and his nation enjoy, haste 
in the colonization and upbuilding of a new country 
is naturally "uneconomic*" But to a Jew who must 

39 7o., p. 210. 

40 Stockdale, op. cit,* p. 83. 


help find a home for his -wandering brethren, an ac- 
celerated economic tempo is soundly "economic." 
Doubtless it was "uneconomic" for the Jews to pay the 
exhorbitant prices for the land which they acquired 
in Palestine. The growth of the Jewish agricultural 
and horticultural structure of Palestine tells another 
story. It was wholly "uneconomic" for a prominent 
group of Jewish business and professional men in 
America to aid Moise Novomeysky to attempt the 
commercial extraction' of the mineral resources of the 
Dead Sea. Expert opinion throughout the world, par- 
ticularly in Germany, foredoomed this attempt to fail- 
ure. Today this "most useless body of water in the 
world" is furnishing work opportunities for 1,500 Jews 
and Arabs and sustenance for 2,500 dependents. The 
foundations have been laid for the creation of a great 
chemical industry, which, it is hoped, will in the course 
of a generation furnish employment to untold thou- 
sands. It was certainly "uneconomic" for Pinhas 
Entenberg to project the harnessing of the Jordan for 
the creation of power for industries and for a land 
irrigation system which were non-existent at the time. 
Today Eutenberg's Palestine Electric Corporation has 
industrially transformed the country. In 1927 this 
company sold 2,527,126 kwh.; in 1937, 71,265,000 kwh. 
It was undoubtedly "uneconomic" for the Jews to pay 
$1,000,000 for a drainage concession of the Huleh lake 
and marshes which had been granted before the War 
by the Ottoman Government to two Beirut merchants 
and which had been lying dormant, and to plan the 
expenditure of an additional $3,000,000, plus $1,000,000 
to be contributed by the Government, for the drainage 
and rehabilitation of that area of 56,939 dunams. But 
it is likely to prove highly "economic" when the work 
is completed and this area plus an additional 46,000 
dunams is ameliorated, whereas now it is only a 
disease-breeding and malarial swamp, Without labor- 


ing the point too much, it is perfectly clear to the 
Jews of the world that it is wholly "economic" for them 
to apply a small percentage of their total resources to 
the founding of a home for their brethren who have 
been so cruelly deprived of every vestige of human 
dignity. It will still be "economic" if, in the future, 
it should be found necessary to write-off part of the 
capital which the Jewish people may devote to the in- 
tensive development and rehabilitation of Palestine. 

It is in the light of the aforegoing considerations 
that it may be reasonably said that Palestine, freed 
from terror and secure in good government, will carry 
its share of the Jewish refugee burden by annually ab- 
sorbing from 100,000 to 125,000 Jews for many years 
to come. 


Can 100,000 to 125,000 Jews from Central and East- 
ern Europe find refuge in the remaining civilized coun- 
tries of the world (other than Palestine)? Will they 
take them? It appears that from 1931-1936 total Jew- 
ish world emigration amounted to 286,764 persons. In 
this period Palestine absorbed 62% (177,895 immi- 
grants), and all other countries 38% (108,869 immi- 
grants). 41 When we remember that since 1930 the 
pressure upon Jewish populations in Central and 
Eastern Europe has been cruelly accentuated the immi- 
gration statistics here given for countries other than 
Palestine afford us little comfort. However, the posi- 
tion may be materially improved by the decisions of 
the Evian Conference and it may not be unreasonable 
to assume that these countries will absorb at least 
from 100,000 to 125,000 immigrants annually. 

If these hopes and predictions are fulfilled then all 
faith in human brotherhood noed not be abandoned. 

41 American Jewish Year BooJc 5699 (1938-39), Philadelphia, 1038, 
pp. 561, 56C, 5G7, 568, 573. Also data furnished by American JowIhIi 
Committee. New York. 

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